Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN) was in 15 hedge funds’ portfolio at the end of the first quarter of 2013. ENZN has experienced an increase in hedge fund sentiment lately. There were 10 hedge funds in our database with ENZN holdings at the end of the previous quarter.
To most stock holders, hedge funds are assumed to be slow, outdated investment vehicles of years past. While there are over 8000 funds trading today, we choose to focus on the masters of this group, about 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total capital, and by paying attention to their top picks, we have unsheathed a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as important, bullish insider trading activity is another way to break down the stock market universe. There are plenty of reasons for an executive to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
Now, it’s important to take a glance at the recent action regarding Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN).
What does the smart money think about Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN)?
At the end of the first quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 50% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings meaningfully.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Gruss Asset Management, managed by Howard Guberman, initiated the largest position in Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN). Gruss Asset Management had 1.7 million invested in the company at the end of the quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC also initiated a $1.4 million position during the quarter. The following funds were also among the new ENZN investors: Jay Petschek and Steven Major’s Corsair Capital Management, Ken Griffin’s Citadel Investment Group, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.
What have insiders been doing with Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN). These stocks are Cempra Inc (NASDAQ:CEMP), Cytokinetics, Inc. (NASDAQ:CYTK), ShangPharma Corp (ADR) (NYSE:SHP), Durata Therapeutics Inc (NASDAQ:DRTX), and OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI). This group of stocks are the members of the biotechnology industry and their market caps resemble ENZN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Cempra Inc (NASDAQ:CEMP) | 4 | 0 | 0 |
| Cytokinetics, Inc. (NASDAQ:CYTK) | 8 | 0 | 0 |
| ShangPharma Corp (ADR) (NYSE:SHP) | 6 | 0 | 0 |
| Durata Therapeutics Inc (NASDAQ:DRTX) | 4 | 7 | 0 |
| OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI) | 6 | 0 | 0 |
With the returns shown by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN) is an important part of this process.
